All posts by Fit Investment Ideas

Making money is about great ideas. This is what this blog is all about.

NorsKe Skog – cheap vs peers, renewables activities for free

I wrote here several times about NSKOG. I am long and I like the story. It is cheap vs peers and its green itiatives at valued at zero. Pareto analyst believes the green intiatives have value equal to its mkt cap. It is cheap. And it is very cheap when paper prices are raising as global paper production capacity is decreasing. ABG belives NSKOG is a takeover candidate. See older posts for details on the above.

Today NSKOG annouunce investment decision on paper capacity conversion into renewable cardboard that is in high demand. See the summary below

On route to become a leading European recycled containerboard producer
NSKOG has made the final investment decision to convert one paper machine at the Golbey (France) site from standard newsprint to recycled containerboard. This is the second site NSKOG will convert (follows Bruck, Austria) and an important step to become a leading recycled containerboard supplier in Europe. The conversion at Golbey will add a further 550kt of cost-competitive and low-emission capacity, starting in Q3’23 – about a year after Bruck. The production will be 100% based on recycled fibre and green energy generated from a new biomass plant at the site. This will bring NSKOG’s total containerboard capacity up to 760kt. The investment is estimated at EUR 250m, fully financed (i.e. 70% debt, 30% cash), and expected to generate EBITDA NOK 700-800m p.a. based on historical prices. Also, conversion will reduce NSKOG’s publication capacity, thus contributing to balance the market, and increase exposure to containerboard which is a growing market (2-3% growth rate). Based on our SOTP, no value seems to be reflected besides the legacy publication business trading at 4.1x EV/EBITDA’21E (consensus). We reiterate Buy, TP NOK 50.

Fully financed – capex 70% debt financed, remaining covered by cash on balance

NSKOG today announced the final investment decision to convert one machine at the Golbey (France) industrial site from standard newsprint to recycled containerboard. Link. NSKOG will invest approx. EUR 250m in the conversion of Golbey PM1, and a syndication of financing facilities of approximately EUR 175m is being finalised, subject to final documentation and final approval from the relevant export credit agency (i.e. 70% debt financing). The remaining investment amount will be covered by cash on balance and cash flows from operations.

Containerboard EBITDA potential of NOK 700-800m based on historic prices
Recycled containerboard production at Golbey PM1 will start in Q4’23, about one year after the start- up of the Bruck PM3, allowing for stepwise commercial introduction of the containerboard volumes. Full production of 550kt of lightweight testliner and fluting is expected in H2’26, allowing for a normal start-up curve. In parallel, Veolia Industries Global Solutions and NSKOG, will construct a green energy biomass facility adjacent to the Golbey industrial site. This facility will provide cost-efficient and sustainable steam to be used for both containerboard and newsprint production. In total, 760kt containerboard capacity (i.e. Bruck and Golbey) should generate an EBITDA of ~NOK 700-800m p.a. from 2025/26, based on historical trend prices for containerboard and recycled fibre.

Buy, TP NOK 50 reiterated
The conversion of Golbey is an important step towards sustainable and growing markets, supporting valuation and the long-term potential. The former should crystalize as the market moves out of the trough and profitability for NSKOG’s legacy business improves (H2’21 with higher publication prices). Valuation is undemanding, trading at ~4.1x EV/EBITDA’22E (incl. the 26% stake in Circa) at consensus estimate (3.7x excl. Circa). Our SOTP of NOK 63/share, leaves ~75% upside to the share price. We expect a positive earnings trend into 2022, and more project updates throughout the year. We thus find the upside attractive, and reiterate Buy and TP of NOK 50/share

Elegant way to protect Scandi portfolio against downturn

Friday was bloody. The markets are quite high and becomming fragile. I wrote here about many long ideas, that I played. I have been torturing myself how to hedge against violent downturn. I am looking at short ideas, that are short based on its fundamentals – that will go down it good or bad markets. Any suggestions appreciated.

So far, I like the most Sparebank idea – short Avanza. The idea behind the idea is simple – people in lockdown had a lot of free time. Many started to gamble at the stock maret. Many used Avanza trading platform. As a result Avanza commissions trippled. Avanza made most money on fx comissions as gamblers were buying US stocks.

As Scandinavia has reopened, people went to work and have much less time. Avanza trading revenues should decrease significantly Sparebank believes. That is not priced in. It is their top short idea for this month published last week.

Two days ago in their daily report the wrote:

(-) AVANZA: We inlcuded AZA among our Monthly funding candidates for June as we consider both earnings estimates and fwd P/E to be too optimistic. Earlier this week we got an interesting US datapoint as JP Morgan guided Q2 trading revenues down 38% from same period last year. Previously, Citigroup guided on a 30% drop in their Q2 numbers. The reduced trading revenues are obviously from highly elevated levels, but we believe that this trend will continue and put pressure on AZA’s shareprice.

I am short Avanza and I increased short yesterday.

I am still bullish on some stocks. My favourites are Biovica and Quantafuel. See previous posts for reasoning. I believe that both have doubling potential on the major catalyst in the next two months. The same as XBrane did, about which I wrote here many times before.

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Biovica should double by the start of commercial launch in today confirmed Q3

Today Biovica International published its annual results. There are important quotes in the CEO comments that investors should focus on:

 “We are following our schedule for being able to launch DiviTum®TKa in the USA during the third quarter 2021 and utilizing the time prior to approval in the best way possible.”

“Our application is one of the few that the FDA resumed its review of, already back in January. Because of that, we are sticking to our goal and remain confident that we will obtain 510(k) approval for DiviTum®TKa during the third quarter of 2021, even though the FDA 510 (k) reviews for IVD products in general have been significantly delayed.”

The study results provide another strong indication that DiviTum®TKa has great potential beyond our initial area of metastatic breast cancer.

Link to the results:

q4-2020-2021-biovica-eng.pdf (mfn.se)

There is an investor call tomorrow at:

When: 18 June 2021 at 10.00 CET
Where: https://tv.streamfabriken.com/biovica-international-q4-2020-2021

Investment idea summary:

  • Biovica has 12 studies including most prominent US HOspitals (Stanford, Mayo , Cleveland ) that show the product work
  • FDA is due to approve the product in Q3. Pareto Securities view on this: “…it could occur any day, is becoming more likely that it will be delayed into August/September
  • The company today announced that it will start selling the product in Q3, shortly after the approval
  • Pharma companies, that have a major milestone in a near future achieve significantly share price appreciation. Xbrane double in two months on positive Phase 3 data study expectation.
  • The 12 study from best hospitals reduces risks for FDA approval. Biovica is perfect candidate to double in the next 2-3 months.

I am long Biovica. I like that the mgmt is long too with 18.3% stake.

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Biovica – FDA approval in Q3, commercionalisation in Q4

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In mid April 2021 I wrote about XBrane for the first time. At that time Xbrane was trading around 78 SEK, it is 170 SEK today.

The reason for the share price growth was the imminent announcement of Phase 3 results and very high likelihood of positive outcome (97% for biosimilars). These shares always perform well prior to such important announcements. I started reducing my position, because we may have a sell the fact situation. The share price could drop significantly even on the positive announcement. Further, the company need to raise additional capital, which may push the share price down. It may be a time to consider taking some money off the table.

There is a very similar situation boiling. Biovica International. It is due to announce the FDA approval during the 3Q21 – within three months from now. As with Xbrane, there is very low likelihood of failure, as BIovica has 12 studies that its product work with the most prominent US hospitals (Stanford, Mayo, Cleveland, etc) , As with Xbrane, the share price should start reacting before the announcement. My base case is that the share price should double by that time, as it did in Xbrane.

Materials for the further reading on the opportunity:

There were two brokers research publicly available now:

ABG Research:

Introduce.se – Biovica – Take-aways from Capital Markets Day

Redeye Research

Biovica: DiviTum to Stir Some Blood (redeye.se)

Calendar

17 June, 21 – Interim Report Q4 2020/2021 – the company is reporting tomorrow its (its financial year ends in April)

Q3 – announcement of FDA approva

Q4 – commercialization

Shareholding

Another positive of the story is management 18.4% stake in the company. They are in it with us. I am long Biovica.

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Quantafuel trade for the next month – 100% upside vs 10% downside

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On the Q1 presentation Quantafuel management stated, that they should have a continues production by the end of Q2. That is in two weeks or so. They said it only a month ago on 14/5/21. They gave themselves quite a short deadline, so they must have known they are very close. It would be irrational to be wrong. Do watch their Q1 call available from their website. Definitely worth spent 33 minutes.

On May 19 they posted on their FB page, which further reduces the risk of delay:

Curious to see what is going on at our plant in Skive, Denmark? Here, we have built the first, and to our knowledge, the only fully automated and continuous process plant transforming mixed waste plastic into high quality products. We are convinced that this approach is essential in our strategy to become the market leader within chemical recycling of plastic! 🌍💚♻️Last week, we were able to reach full line production capacity of 625 kg per hour in a controlled and stable process. Now we are focusing on increasing operational uptime at high production capacity into weeks, and then months. Watch this space!

I think there are two scenarios:

  • If they announce continues production, the share price should double back to 70-80 NOK where it was a few months ago.
  • If they delay the share price would retreat back to mid 30s SEK.

This presents quite a favorable risk return – 100% upside vs 10% downside. We have a large position in Quantafuel to benefit from this.

Other opportunities:

  • I wrote here several times about Xbrane. I started when the share price was about 75 SEK. It is about 175 SEK today, two months later. I am reducing my position every day. The announcement on Phase 3 results could come any day. Based on the very strong performance I am concerned that the positive announcement will generate sell the fact situation. The risk return is becoming unfavorable. I am switching to Biovica. It is the same situation as Xbrane. I believe Biovica will double in the next three months before their FDA approval due by end of Q3. Read for more details my previous post

Freyer announced yesterday, that they will have a shareholder meeting at the end of June. The SPACs usually move before the shareholder meeting, as the main backers wants to get the deal approved. The SPAC now trades at its redemption value, so again there is very favorable risk return for two weeks investment horizon.

I am very bullish on restructured rig owners Valaris and Noble. Both have been deleveraged and IPOed again. It is early days and they trade at big discount to the unrestructured peers. There is DNB call on this today at 17.00, if you have account at DNB, do register and do listen.

https:/

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Xbrane up 100% in 3 months. Biovica will follow the lead.

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In mid April 2021 I wrote about XBrane for the first time. I recomended the investment based on the below thesis. At that time Xbrane was trading around 78 SEK. I sold again part of my holdings at 160 SEK. The idea generated more than 100% return over less than two months, which is over 600% annualised return.

The reason for the share price growth was the imminent announcement of Phase 3 results. These shares always perform well prior to such important announcements. It traded so well that I started reducing my position, because I am concerned, that the stock went up so much, that we may have a sell the fact situation. The share price could drop significantly even on the positive announcement. Even if it does not fall, the company may raise additional capital, which may push the share price down. So if you have generated good return, it may be a time to consider taking some money off the table.

There is a very similar situation boiling. Biovica International. It is due to announce the FDA approval during the 3Q21 – within three months or so from now. As with Xbrane, the share price should start reacting before the announcement. My base case is that the share price should double by that time.

Biovica is starting to move today. UP 12% based on Reday research published today. The research is available for download here (from Biovica website):

Research headline below:

Premium potential
With Biovica offering significant upside potential over the next six to 18 months, Redeye raises our base case fair value to SEK 95 (46). DiviTum’s FDA approval will reduce risk and bring commercial clinical sales, while subsequent private use and public reimbursement should propel volumes and clinical support. The case is bolstered by potential expansion beyond the core market of advanced metastatic breast cancer (mBC).

US launch nearing
As FDA approvals are still not back to normal after the COVID pandemic, DiviTum is now likely to be approved sometime between August and October. Still, this exceptional period has been a reminder of the importance of innovation, screening and diagnostics – especially as screening has been impaired since the pandemic. This should increase
demand for cancer therapy monitoring and, potentially, for advanced cancer care.

Expanding clinical support
Biovica’s prepares for the US launch supported with a substantial body of evidence. This will be essential both in ensuring private insurance cover and for the pending reimbursement process. The prospective study support is about to increase substantially.

Higher market potential
Our base case now takes a more positive view of Biovica’s ability to protect its significant long-term market share and weather price pressure. We factor in higher EBIT margins during the peak sales period (2028-30). Our more positive view of the core mBC market in
the US and increased support from additional markets such as advanced breast cancer (ABC) remain very conservative versus our bull case (SEK 325).

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Noble and Valaris – restructured and deleveraged rig companies are back in the market at a discount to unrestructured peers

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I have bought into two new transactions in the last two days: Noble and Valaris. These are rig owners that went through bankruptcy, got deleveraged and relisted. The companies are trading at significant discount to its peers, that have not deleveraged. Very interesting opportunity. I enclose summaries from research reports published yesterday on both. It is wrong not to look into those.

DNB note published this morning on Noble:

Ahead of the relisting
 
Noble is set to begin trading on the NYSE tomorrow (9 June), following its current listing on the OTC market. We believe transitioning to a main exchange will help it reach a larger investor audience and raise investor awareness as well as improve trading volumes. In sum, we believe this may help it trade on a par with peers, or even at a premium, compared to its current discount valuation. To close the gap to its most relevant peer, Maersk Drilling, we see 33% potential upside on asset values, while on 2023e EV/EBITDA (8.6x), we calculate 54% potential upside in Noble’s shares. We maintain our BUY and USD32 target price, and keep it among our preferred investment ideas in the offshore drilling sector.   An industry leader and consolidator. Since emerging from Chapter 11 in February, Noble has executed a merger with Pacific Drilling and we expect the company to drive industry consolidation. Of its 12 floaters and 12 jackups, only three rigs are uncontracted, supporting its contracting and operational success. From discount to possible premium valuation. Given its current listing in the OTC market, we believe the transition to a main stock exchange could help the stock be valued on a par with peers, or even at a premium. We see elements within the Noble equity story that differentiate it from peers: 1) a high portion of the fleet is contracted and has solid backlog coverage; 2) we expect positive near-term cash-flow generation; and 3) we see potential for the company to drive industry consolidation. BUY and USD32 target price reiterated – attractive stand-alone and relative valuation. Based on a stand-alone valuation, we have a fully diluted NAV of USD29/share, 21% above the recent OTC market price of cUSD24/share. Based on relative valuation, we consider Maersk Drilling as its closes peer, and see 33% (USD32/share) and 54% (USD37/share) potential upside for Noble on asset values and 2023e EV/EBITDA, respectively.      
   

DNB´s Comment on Valaris published today:

 News Comment – Building some UDW backlog
  
 Having little backlog and visibility for its UDW floaters, the 3-year extension announced with Chevron for its high-spec 7G drillship Valaris DS-18 (Relentless) is likely to be welcomed by investors. While no economics were announced, we believe the average rate could be cUSD250k–260k for the 3-year period starting early 2022. It is unclear if MPD services are included, but we note that the rig is MPD capable, and we understand this service has been available under its current contract with Chevron. Compared to our estimates, we are modelling such rigs (conservatively) at USD210k–225k for 2022/23. Hence, it should be supportive for our estimates. Looking ahead, we believe Valaris could be well placed to add more UDW backlog in Australia, the US GoM and Angola. Contract announced. After the US market close yesterday, Valaris announced that it has secured a 3-year extension for the Valaris DS-18 (ex Relentless) (7G drillship from 2014) starting in Q2 2022, in direct continuation with its existing contract with Chevron. The rig is among the highest specification drillships in the global fleet, having features like MPD, two 7-RAM BOPs and high hook load capacity. No contract economics were disclosed. Benefiting from incumbent position. Valaris’ DS-18 got contracted by Chevron in H2 2019 for work starting in mid-2020, and to our understanding Chevron has been working to extend both this rig and the Deepwater Conqueror of Transocean (due to complete its current contract late-2021). Hence, we believe the announced contract is a result of a direct negotiation as opposed to a full tender process. Day-rate seen around the mid-USD200k level. Based on the current market and industry updates, we believe the day-rate level may include annual escalations and that it could average USD250k–260k. As the rig is MPD-capable, this service may be included in the contract and we believe this service has been available under its existing contract with Chevron. Thus, we estimate an annual EBITDA contribution of USD35m–40m. Potentially above our modelled day-rate. In our generic (conservative) modelling of 7G drillships, we have assumed USD210k–225k for 2022/23, with annual EBITDA contribution of USD22m in 2023e. Hence, we would consider a potential rate level around the mid-USD200k level as supportive for our estimates and valuation, even if MPD is included (this service is typically priced at USD20k/day). At the same time, as the contract is extending into early 2025, it may be slightly on the downside for the out-years compared some consensus participants. Helping backlog and visibility. As Valaris has a large floater fleet (16 UDW rigs) with most rigs sitting idle (10 rigs) and the contracted rigs mostly having short-term contracts, we believe building backlog has been a priority from a portfolio perspective. We also believe investors will appreciate backlog build in the current situation as it will help the cash-flow profile. More could come Valaris’ way. While most jobs in the UDW market still are of short-term nature (except Petrobras tenders), there is small selection of long-term opportunities, including a development programme in Angola, a PnA programme in Australia (for a semi) and a 20k job in the US GoM. We believe Valaris is among the contenders on these jobs and that rig selection on all these jobs should be in the next few months.       Last published research note:
Recommendation: Buy

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MPC Energy Solutions – Priced at cash despite significant value potential in firm backlog.

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I am long MPC Energy Solution. It is one of the investments, that seems to be right, but takes time to move. This morning SpareBank issued new research report – summary is below:

MPC Energy Solutions | MPCES NO

Priced at cash despite significant value potential in firm backlog

This morning MPCES announced that it is has made its first investment decision on its execution pipeline by investing in a 3.4MW combined heat and power project in Puerto Rico. The project, which has a 12 year USD-denominated energy service agreement and is expected to produce 25.30,000MWh/annum, has previously been listed as one out of 6 projects to be financed by equity raised in the IPO. To our knowledge, the project was initially expected to be under operation in June, but is now expected to be commissioned by August. According to the company the project will yield returns in the range ~10-15% as guided in its prospectus. End Q1 2021, MPCES held a cash position of ~USD82.7m or a cash value per share of ~NOK31/share. In addition, MPCES was transferred an early stage development portfolio valued at USD10m during the IPO (value of ~NOK3.7/share). This stands in contrast to a current share price of NOK33.7/share and a P/B of 1.04x. In our view, the company is undervalued at its current share price and offers an attractive risk/reward.

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BIOVICA – Trade for the next quarter

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In mid April 2021 I wrote about XBrane for the first time. I recomended the investment based on the below thesis. At that time Xbrane was trading around 78 SEK. I sold today part of my holdings at 145 SEK. The idea generated 85% return over less than two months, which is over 500% annualised return.

Xbrane Partners With Bausch & Lomb To Enter USD 12 Billion Market | Seeking Alpha

The reason for the share price growth was the imminent announcement of Phase 3 results. These shares always perform well prior to such important announcements. It traded so well that I started reducing my position, because I am concerned, that the stock went up so much, that we may have a sell the fact situation. The share price could drop significantly even on the positive announcement. Even if it does not fall, the company may raise additional capital, which may push the share price down. So if you have generated good return, it may be a time to consider taking some money off the table.

There is a very similar situation boiling. Biovica International. It is due to announce the FDA approval during the 3Q21 – within three months or so from now. As with Xbrane, the share price should start reacting before the announcement. My base case is that the share price should double by that time.

The company is hosting Investor day on JUne 9. – see the Press Releases – Biovica

The company has an extensive clinical validation in collaboration world leading cancer centers for its cancer product:

  • 22 studies with peer-reviewed publications – 2,867 patients
  • 10 ongoing studies in collaboration with Johns Hopkins, Mayo Clinic, SWOG and more

The product has been submitted for FDA approval that is due to be received during 3Q21. The company should start performing well. In my experience the share prices of such companies go up before the investor day (9 June) and before the major announcement (FDA approval in Q3). The stock already started moving from mid May. I would expect this to accelerate in early June before the Investor day. I expect furthe share price growth during the Q3 before the announcement. I have a medium size position in Biovica. The current share price is 41 SEK, Pareto has a price target of 103 SEK.

The link to presentation:

PowerPoint Presentation (hemsida.eu)

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NSKOG – TOP IDEA at Pareto and Sparebank

We have been very bullish on Norske Skog. Pareto and Sparebank has added today NSKOG to their top ideas:

Pareto Securities today:

Pareto Securities Top Ideas for Norway published today:

Equity Portfolio Norway – May closed out Q1 reporting season and global equity markets were flattish with inflation in focus. Our portfolio returned 1.5% m/m, falling short of OSEBX at 2.8% m/m – but remain ahead of the index for the year. Our best performer FLNG (+26.0%) was countered by three shares trading down double digits (BWE, ICEGR and OHT). Five stocks beat the index in May. For June, we make eight changes to our portfolio, replacing AKER, BWE, FLNG, ICEGR, KIT, MWTR, OHT and VOLUE with ACC, BONHR, BWLPG, DNO, ELK, HUNT, NSKOG and PEXIP, keeping AFG and AUSS.

NSKOG NO – Attractive valuation support on the tail of earnings trough

We find a significant revaluation potential, as the market moves out of the trough and profitability for NSKOG’s legacy business improves. A support that should crystalize with new publication paper prices announced early July. Here, NSKOG targets 15-20% price uplift for H2’21 and into 2022, which seems likely following 3.3mt capacity cuts for the industry (about 20% of total market). Valuation is undemanding, trading at 4.1x EV/EBITDA’22E (incl. the 26% stake in Circa) at consensus estimate. Our SOTP of NOK 64/share, leaves ~80% upside to the share price. With more project updates expected throughout the year, combined with recovering publication paper prices, we find the entry point highly attractive. We reiterate Buy, TP NOK 50.

Sparebank Research today:

SB1M TOP PICKS FOR JUNE: BUY: We add Xplra, Hexagon Composites, Cadeler, Okea, Yara, and keep SATS, Schibsted, Norske Skog, Lerøy Seafood. Removiing Salmar, Telenor, Genel, Subsea 7 and Circa Group. SELL: Avanza (new), Hexagon Purus (new), XXL, SAS. Removing ITM Power, DNO, KOA and Fjordkraft

Newsprint prices could normalise in 2H 2021 -> material upside for the NSKOG share, in our mind

We estimate that run-rate EBITDA could be around “over-the-cycle” EBITDA of NOK1bn in 2H 2021

We keep our Buy recommendation and NOK50 target price after the Q1 2021 report. The key reasons why we recommend buying
NKSOG is i) NSKOG is in our mind an acquisition target, ii) newsprint prices are increasing in Asia/North America and we argue that this
is will affect newsprint prices in Europe from 2H 2021 (management comments at the Q1 2021 presentation supports our view) and iii)
we estimate that the conversion from newsprint to container board is accretive for shareholders in NSKOG. The main concern for
investors in NSKOG is in our mind lack of cash flow to cover capex and risk for capex overruns. We expect that cash flows will increase
with a stronger market and argue that the risk profile for the conversion capex is not as high as investors interpret. With newsprint
prices 15% below 2019 level and an EBITDA-margin around 11%, NSKOG’s market cap could increase with NOK5.7bn – which is more
than the containerboard conversion capex -> attractive risk/reward, in our mind.
• We would not be surprised if NKSOG is acquired by StoraEnso. Our take is that NSKOG fits well with StoraEnso as i) StoraEnso is
currently evaluating a consumer board investment in Skoghall with an estimated capex of EUR800 to 850m, ii) StoraEnso expects
growth from building solutions and biomaterials (fit with NSKOG’s Circa, Cebina, bio-composites and FibreMatrix) and iii) a NSKOG
acquisition would be a small ad-on for StoraEnso (NSKOG’s market cap is 3% of StoraEnso’s market cap). In addition, we estimate
that OceanWood, which owns 42.85% of NSKOG has an IRR of 16% if it exits its investment at current market cap.
• Newsprint prices expected up from 2H 2021 – prices have started to increase in Asia/North America. Our take is that more than
25% of newsprint capacity will be taken out in 2020/2021 (based on announcements from UPM, StoraEnso and SCA). Our take is
that this will have a positive effect on prices from 2H 2021. The effect of lower supply has in our mind had an effect on prices,
especially in Asia, and according to our knowledge NKSOG is now exporting to exporting to Asia. Our assumption on higher prices as
production is down is supported by statements from RISI the last months commenting in the price increases in Asia and this will
most likely affect Europe from 2H 2021. Management comments at the Q1 2021 presentation supports our view, in our mind
• Accretive containerboard conversion we argue investors are too concerned about capex overruns and funding. Based on the
margin competitors are reporting, we argue that the containerboard conversion is accretive for NSKOG. The capex for NKSOG is
sizable compared to its size, but we that expect cash flow from operations and increased leverage will be sufficient to cover the
capex from late 2021 to 1H 2023. The EUR350m containerboard conversion is a sizeable investment for NSKOG, but the capex
should in our mind be split according to the risk for the different capex components. We have divided the capex into three risk
categories and see low capex risk for increased storage capacity and water treatment (estimate EUR70m of capex) and medium risk
for OCC* treatment (estimate EUR140m of capex) and higher risk for conversion capex (estimate EUR140m of capex).
Source: NSKOG, SpareBank 1 Markets, RISI and Bloomberg *old corrugated container